ISLAMABAD: The Tax-to-GDP ratio stood at 9 percent during 2023-24, according to the Federal Board of Revenue (FBR) report.

The FBR’s new report on revenue forecasting (2024-25) said the tax-GDP ratio remained in the range of 8.7 percent to 9.2 percent. Last year, the tax–GDP ratio was 8.5 percent however, during fiscal year 2023-24, it has started improving and stood at 9.0 percent.

The FBR report said that the traditional methodology has been adopted to forecast FBR revenues for FY2024-25. The autonomous growth has been applied on base year FY2023-24. An increase of Rs. 1,922 billion is forecasted for FY2024-25, thus arriving at expected revenue collection of Rs. 11,174 billion.

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The revenue forecasting for 2024-2025 is estimated at Rs.11.17 trillion without budgetary measures. Most of the FBR taxes are buoyant and are positively correlated with actual variations in macroeconomic indicators used in the forecasting model.

Hence, there is potential for achieving growth in tax revenues, provided that macroeconomic indicators perform well. With the improvement in local and global economic conditions, the tax revenues are expected to increase accordingly. Similarly, removing import restrictions further, the tax collection at import stage shall improve as well, FBR added.

The FBR revenue target for FY2024-25, without budgetary measures is projected at Rs. 11,174 billion. The projected target is 20.8% higher than the collection figure of over Rs. 9,252 billion for 2023-24.

Copyright Business Recorder, 2024